An elaborate VAT scam constructed by three members of the Copp family (Geoffrey, 55, his brother Andrew, 51, and son Joshua, 24) allowed them to live a life of pure excess, opulence and greed.
A luxury fleet of cars including a Range Rover Vogue, a Bentley Continental and a Lamborghini Gallardo collectively worth a reported £362,000; a £4 million mansion in the idyllic north London suburb of Barnet; nearly £300,000 on private jets to one of Geoffrey’s mortgage-free homes in Malaga; and an impressive collection of Audemars Piguet and Rolex watches worth an estimated £50,000 were just some of the extreme purchases made by the fraudsters.
Whilst enjoying the many gambling trips to Vegas casinos and posing on private jets with cash-loaded briefcases, foreign manual workers were employed by the trio under the umbrella company Central Payroll Specialists (CPS)—later rebranded as Quality Premier Services (QPS)—to survive on minimum wage.
It was used by a number of recruitment agencies to oversee the salaries of thousands of temporary workers across industries such as construction, and, after information was passed on to Essex Police, it was found to have not passed VAT obtained from the recruitment agencies to HM Revenue & Customs; leading to a full-on joint investigation by the HMRC Criminal Taxes Unit and the Kent and Essex Serious Crime Directorate.
A picture of a notepad found on Joshua’s phone detailing the VAT breakdown and how it was shared between the three parties was a considerable help to the detectives, and the notepad itself was later found at the QPS office near Rickmansworth.
In the aftermath of the case—which found up to £46 million in unpaid VAT and the scammers sentenced to a total of 27 and-a-half years—the global contractor compliance consultancy, 6CATS International, is urging recruitment agencies to make sure the suppliers they work with are fully compliant before building relationships. “This is an extreme case, yes, but it’s far from being an unusual one and over the past few years we’ve seen an increasing crackdown on firms that operate outside of the law and put the recruitment agencies they work for, and the contractors those agencies place, at serious risk”, says Michelle Reilly, 6CATS’ CEO.
“However, there are still many organisations out there under the misguided belief that they can somehow slip under the radar and, while few will be quite as extravagant as this one has been, it’s highly likely that they will be caught out. This will not only leave your firm scrabbling around to find a new supplier, but can also leave your contractors and even your agency at risk of a major punishment such as an unlimited fine or potentially a prison sentence.”
Reilly continues to suggest it will be even harder for those suppliers operating unethically in the wake of this case; considered to be the largest UK payroll fraud of its kind. “The potential gains for breaking the law are clearly high, but the risks are so much greater and with HMRC becoming ever more effective at tracking down tax evaders, those suppliers that are still operating non-compliantly will eventually be caught.”
“The government knows it can bring in revenue from chasing down those committing evasion and with the introduction of legislation like the Common Reporting Standard and the Criminal Finance Bill, it’s only going to become harder to get away with operating outside of the law. It’s now time for recruitment agencies to take the bull by the horns and take responsibility for ensuring their suppliers are operating compliantly before it’s too late.”
Writing this post has brought back memories of similar past incidences: the senior NHS agency manager jailed for two-and-a-half-years for defrauding the system out of £130,000, and both directors of One Stop Recruitment who failed to pay more than £245,000 of employees’ tax and NICs, to be exact. And, unfortunately, fraud and fraud risks associated with recruitment are commonplace and often overlooked by businesses.
There’s a need to recognise fraud-related risks to prevent both a damaged reputation and financial losses. Although the actions covered in this piece were carried out for personal financial gain, a failure to comply with the prevention, identification and detection of fraudulent activities will ultimately lead to criminal prosecution.